They manufactured machinery for sale and lease, ranging from commercial scales and industrial time recorders, meat and cheese slicers, to tabulators and punched cards. Thomas J. Watson, Sr., fired from the National Cash Register Company by John Henry Patterson, called on Flint and, in 1914, was offered a position at CTR.[11] Watson joined CTR as General Manager then, 11 months later, was made President when court cases relating to his time at NCR were resolved.[12] Having learned Patterson's pioneering business practices, Watson proceeded to put the stamp of NCR onto CTR's companies.[13] He implemented sales conventions, "generous sales incentives, a focus on customer service, an insistence on well-groomed, dark-suited salesmen and had an evangelical fervor for instilling company pride and loyalty in every worker".[14][15] His favorite slogan, "THINK", became a mantra for each company's employees.[14] During Watson's first four years, revenues reached $9 million and the company's operations expanded to Europe, South America, Asia and Australia.[14] Watson never liked the clumsy hyphenated name "Computing-Tabulating-Recording Company" and on February 14, 1924 chose to replace it with the more expansive title "International Business Machines".[16] By 1933 most of the subsidiaries had been merged into one company, IBM.[17]

In 1937, IBM's tabulating equipment enabled organizations to process unprecedented amounts of data, its clients including the U.S. Government, during its first effort to maintain the employment records for 26 million people pursuant to the Social Security Act,[18] and the tracking of persecuted groups by Hitler's Third Reich,[19][20] largely through the German subsidiary Dehomag.

In 1949, Thomas Watson, Sr., created IBM World Trade Corporation, a subsidiary of IBM focused on foreign operations.[21] In 1952, he stepped down after almost 40 years at the company helm, and his son Thomas Watson, Jr. was named president. In 1956, the company demonstrated the first practical example of artificial intelligence when Arthur L. Samuel of IBM's Poughkeepsie, New York, laboratory programmed an IBM 704 not merely to play checkers but "learn" from its own experience. In 1957, the FORTRAN scientific programming language was developed. In 1961, IBM developed the SABRE reservation system for American Airlines and introduced the highly successful Selectric typewriter. In 1963, IBM employees and computers helped NASA track the orbital flight of the Mercury astronauts. A year later, it moved its corporate headquarters from New York City to Armonk, New York. The latter half of the 1960s saw IBM continue its support of space exploration, participating in the 1965 Gemini flights, 1966 Saturn flights and 1969 lunar mission.

On April 7, 1964, IBM announced the first computer system family, the IBM System/360. It spanned the complete range of commercial and scientific applications from large to small, allowing companies for the first time to upgrade to models with greater computing capability without having to rewrite their applications. It was followed by the IBM System/370 in 1970. Together the 360 and 370 made the IBM mainframe the dominant mainframe computer and the dominant computing platform in the industry throughout this period and into the early 1980s. They, and the operating systems that ran on them such as OS/VS1 and MVS, and the middleware built on top of those such as the CICStransaction processing monitor, had a near-monopoly-level hold on the computer industry and became almost synonymous with IBM products due to their marketshare.[22]

In 1993, IBM posted a US$8 billion loss - at the time the biggest in American corporate history.[25]Lou Gerstner was hired as CEO from RJR Nabisco to turn the company around.[26] In 2002, IBM acquired PwC consulting, and in 2003 it initiated a project to redefine company values, hosting a three-day online discussion of key business issues with 50,000 employees. The result was three values: "Dedication to every client's success", "Innovation that matters--for our company and for the world", and "Trust and personal responsibility in all relationships".[27][28]

In 2015, IBM announced three major acquisitions: Merge Healthcare for $1 billion,[46] data storage vendor Cleversafe, and all digital assets from The Weather Company, including Weather.com and the Weather Channel mobile app.[47][48] Also that year, IBMers created the film A Boy and His Atom, which was the first molecule movie to tell a story. In 2016, IBM acquired video conferencing service Ustream and formed a new cloud video unit.[49][50] In April 2016, it posted a 14-year low in quarterly sales.[51] The following month, Groupon sued IBM accusing it of patent infringement, two months after IBM accused Groupon of patent infringement in a separate lawsuit.[52]

Headquarters and offices

IBM is headquartered in Armonk, New York, a community 37 miles (60 km) north of Midtown Manhattan.[56] Its principal building, referred to as CHQ, is a 283,000-square-foot (26,300 m2) glass and stone edifice on a 25-acre (10 ha) parcel amid a 432-acre former apple orchard the company purchased in the mid-1950s.[57] There are two other IBM buildings within walking distance of CHQ: the North Castle office, which previously served as IBM's headquarters; and the Louis V. Gerstner, Jr., Center for Learning[58] (formerly known as IBM Learning Center (ILC)), a resort hotel and training center, which has 182 guest rooms, 31 meeting rooms, and various amenities.[59]

Finance

For the fiscal year 2017, IBM reported earnings of US$5.7 billion, with an annual revenue of US$79.1 billion, a decline of 1.0% over the previous fiscal cycle. IBM's shares traded at over $125 per share, and its market capitalization was valued at over US$113.9 billion in September 2018.[66] IBM ranked No. 34 on the 2018 Fortune 500 rankings of the largest United States corporations by total revenue.[67]

Services provisions include Redbooks, which are publicly available online books about best practices with IBM products, and developerWorks, a website for software developers and IT professionals with how-to articles and tutorials, as well as software downloads, code samples, discussion forums, podcasts, blogs, wikis, and other resources for developers and technical professionals.[88]

In terms of investment, IBM's R&D spend totals several billion dollars each year. In 2012, that expenditure was approximately US$6.9 billion.[93] Recent allocations have included $1 billion to create a business unit for Watson in 2014, and $3 billion to create a next-gen semiconductor along with $4 billion towards growing the company's "strategic imperatives" (cloud, analytics, mobile, security, social) in 2015.[94]

Current research includes a collaboration with the University of Michigan to see computers act as an academic adviser for undergraduate computer science and engineering students at the university,[101] and a partnership with AT&T, combining their cloud and Internet of Things (IoT) platforms to make them interoperable and to provide developers with easier tools.[102]

The company is also involved in research into advanced algorithms and machine learning and their decision-making processes.[103] To that end, the company recently released an analysis tool for how and why algorithms make decisions while scanning for biases in automated decision-making.[104]

Brand and reputation

IBM is nicknamed Big Blue in part due to its blue logo and color scheme,[105][106] and also partially since IBM once had a de facto dress code of white shirts with blue suits.[105][107] The company logo has undergone several changes over the years, with its current "8-bar" logo designed in 1972 by graphic designerPaul Rand.[108] It was a general replacement for a 13-bar logo, since period photocopiers did not render large areas well. Aside from the logo, IBM used Helvetica as a corporate typeface for 50 years, until it was replaced in 2017 by the custom-designed IBM Plex.

People and culture

Employees

IBM has one of the largest workforces in the world, and employees at Big Blue are referred to as "IBMers". The company was among the first corporations to provide group life insurance (1934), survivor benefits (1935), training for women (1935), paid vacations (1937), and training for disabled people (1942). IBM hired its first black salesperson in 1946, and in 1952, CEO Thomas J. Watson, Jr. published the company's first written equal opportunity policy letter, one year before the U.S. Supreme Court decision in Brown vs. Board of Education and 11 years before the Civil Rights Act of 1964. The Human Rights Campaign has rated IBM 100% on its index of gay-friendliness every year since 2003,[119] with IBM providing same-sex partners of its employees with health benefits and an anti-discrimination clause. Additionally, in 2005, IBM became the first major company in the world to commit formally to not use genetic information in employment decisions; and in 2017, IBM was named to Working Mothers 100 Best Companies List for the 32nd consecutive year.[120]

IBM has several leadership development and recognition programs to recognize employee potential and achievements. For early-career high potential employees, IBM sponsors leadership development programs by discipline (e.g., general management (GMLDP), human resources (HRLDP), finance (FLDP)). Each year, the company also selects 500 IBMers for the IBM Corporate Service Corps (CSC),[121] which has been described as the corporate equivalent of the Peace Corps and gives top employees a month to do humanitarian work abroad.[122] For certain interns, IBM also has a program called Extreme Blue that partners top business and technical students to develop high-value technology and compete to present their business case to the company's CEO at internship's end.[123]

The company also has various designations for exceptional individual contributors such as Senior Technical Staff Member (STSM), Research Staff Member (RSM), Distinguished Engineer (DE), and Distinguished Designer (DD).[124] Prolific inventors can also achieve patent plateaus and earn the designation of Master Inventor. The company's most prestigious designation is that of IBM Fellow. Since 1963, the company names a handful of Fellows each year based on technical achievement. Other programs recognize years of service such as the Quarter Century Club established in 1924, and sellers are eligible to join the Hundred Percent Club, composed of IBM salesmen who meet their quotas, convened in Atlantic City, New Jersey. Each year, the company also selects 1,000 IBMers annually to award the Best of IBM Award, which includes an all-expenses paid trip to the awards ceremony in an exotic location.

IBM's culture has evolved significantly over its century of operations. In its early days, a dark (or gray) suit, white shirt, and a "sincere" tie constituted the public uniform for IBM employees.[125] During IBM's management transformation in the 1990s, CEO Louis V. Gerstner, Jr. relaxed these codes, normalizing the dress and behavior of IBM employees.[126] The company's culture has also given to different plays on the company acronym (IBM), with some saying is stands for "I've Been Moved" due to relocations and layoffs,[127] others saying it stands for "I'm By Myself" pursuant to a prevalent work-from-anywhere norm,[128] and others saying it stands for "I'm Being Mentored" due to the company's open door policy and encouragement for mentoring at all levels.[129] In terms of labor relations, the company has traditionally resisted labor union organizing,[130] although unions represent some IBM workers outside the United States.[131] In Japan, IBM employees also have an American football team complete with pro stadium, cheerleaders and televised games, competing in the Japanese X-League as the "Big Blue".[132]

In 2015, IBM started giving employees the option of choosing either a PC or a Mac as their primary work device, resulting in IBM becoming the world's largest Mac shop.[133] In 2016, IBM eliminated forced rankings and changed its annual performance review system to focus more on frequent feedback, coaching, and skills development.[134]

In 2011, IBM became the first technology company Warren Buffett's holding companyBerkshire Hathaway invested in.[145] Initially he bought 64 million shares costing 10.5 billion dollars. Over the years he increased his IBM holdings however he reduced it by 94.5% to 2.05 million shares at the end of 2017. By May 2018 he was completely out of IBM.[146]